Prentice Hall, Inc. © 2006 5-1

STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION

THOMAS L. WHEELEN J. DAVID HUNGER

CHAPTER 5Internal Scanning: Organizational Analysis

Prentice Hall, Inc. © 2006 5-2

Resource-Based Approach to Organizational Analysis

Internal strategic factors --

–Critical strengths and weaknesses that are likely to determine if the firm will be able to take advantage of opportunities while avoiding threats

Prentice Hall, Inc. © 2006 5-3

Resource-Based Approach to Organizational Analysis

•Resources

•Capabilities

•Competency

•Core competency

•Distinctive competency

Prentice Hall, Inc. © 2006 5-4

Core and Distinctive Competencies

VRIO Framework --

–Value

–Rareness

–Imitability

–Organization

Prentice Hall, Inc. © 2006 5-5

Resource-Based Approach to Organizational Analysis

5-Step Approach Strategy Analysis --

1. Identify and classify resources2. Combine strengths into capabilities3. Appraise profit potential of capabilities4. Select strategy that best exploits 5. Identify resource gaps invest in weaknesses

Prentice Hall, Inc. © 2006 5-6

Continuum of Sustainability

Prentice Hall, Inc. © 2006 5-7

Sustainability of Advantage

Durability --

–Rate at which a firm’s underlying resources and capabilities depreciate or become obsolete

Prentice Hall, Inc. © 2006 5-8

Sustainability of Advantage

Imitability --

–Rate at which a firm’s underlying resources and capabilities can be duplicated by others

Prentice Hall, Inc. © 2006 5-9

Sustainability of Advantage

Core Competency can be imitated --

–Transparency–Transferability–Replicability

Prentice Hall, Inc. © 2006 5-10

Business Models

Company’s method for making money in the current business environment.

Prentice Hall, Inc. © 2006 5-11

Business Models

Types of Models --

–Customer Solutions Model–Profit Pyramid Model–Multi-Component System/Installed Base Model–Advertising Model–Switchboard Model

Prentice Hall, Inc. © 2006 5-12

Business Models

Types of Models --

–Time Model–Efficiency Model–Blockbuster Model–Profit Multiplier Model–Entrepreneurial Model–De Facto Standard Model

Prentice Hall, Inc. © 2006 5-13

Value-Chain Analysis

Linked set of value-creating activities beginning with basic raw material and ending with distributors getting final goods into hands of customers

Prentice Hall, Inc. © 2006 5-14

Value-Chain Analysis

Typical Value Chain for a Manufactured Product

Prentice Hall, Inc. © 2006 5-15

Corporate Value-Chain Analysis

•Primary activities

•Support activities

Prentice Hall, Inc. © 2006 5-16

Corporation’s Value Chain

Prentice Hall, Inc. © 2006 5-17

Scanning Functional Resources & Capabilities

Basic Organizational Structures --

–Simple structure–Functional structure–Divisional structure–Strategic business units (SBU’s)–Conglomerate structure

Prentice Hall, Inc. © 2006 5-18

Basic Organizational Structures

Prentice Hall, Inc. © 2006 5-19

Corporate Culture

Collection of beliefs, expectations, and values learned and shared by a corporation’s members and transmitted from one generation of employees to another

Prentice Hall, Inc. © 2006 5-20

Strategic Marketing Issues

–Market Position & Segmentation–Marketing Mix–Product Life Cycle–Brand & Corporate Reputation